TWSA520 Analytical Procedures 　　　　

Status

Revised by Auditing Standards Committee in Taiwan on 4 October, 2022

Summary

This Standard deals with the auditor’s use of analytical procedures as substantive procedures (“substantive analytical procedures”). It also deals with the auditor’s responsibility to perform analytical procedures near the end of the audit that assist the auditor when forming an overall conclusion on the financial statements.

When designing and performing substantive analytical procedures, either alone or in combination with tests of details, as substantive procedures, the auditor shall determine the suitability of particular substantive analytical procedures for given assertions, evaluate the reliability of data from which the auditor’s expectation of recorded amounts or ratios is developed, develop an expectation of recorded amounts or ratios and evaluate whether the expectation is sufficiently precise to identify a misstatement, and determine the amount of any difference of recorded amounts from expected values that is acceptable without further investigation.

The auditor shall design and perform analytical procedures near the end of the audit that assist the auditor when forming an overall conclusion as to whether the financial statements are consistent with the auditor’s understanding of the entity.

If analytical procedures performed in accordance with this Standard identify fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount, the auditor shall investigate such differences.

Effective date

This Standard is effective from 15 December, 2022.